Does Cineform only does scene detection when capturing and converting the m2t files to the cineform codec?

I tried just capturing the files from the camera (Canon XH A1) and it won't scene detect anything, even though scene detection is enabled in the pref.

However when I bring the file into HDV-Split, it will detect all the scene changes and split it accordingly

Any suggestions...?

Scene detection is optimized for RT capture and conversion in one step, the file based M2T to AVI doesn't work as well, that is in on the list to improve.

the file based M2T to AVI doesn't work as well, that is in on the list to improve.

So in what mode would I be able to receive scene detection? Only when capturing m2t and converting to AVI at the same time?

Yes, that is what the tool was primarily designed to do, on the fly conversion from firewire based M2T streams to AVIs.